Hire purchase payments, car finance, store cards, different interest rates, payment times and amounts, it’s easy for it all to get away on you. Here are some tips that may help get debt under control, put more back into your pocket and may help you to ease any financial stress.
Rolling all your debts into one easy to manage loan could make sense.
Interest on hire purchase and store cards interest payments can often be over 20% p.a. whereas interest on an ASB Debt Consolidation Loan is less. Paying less in interest simply because you’re organising your finances in a smarter way could make sense.
Ken and Sue had dealer finance for Sue’s car, and a 5-year hire purchase agreement for the kids’ new beds and a lounge suite. They didn’t pay anything on the furniture for the first six months as payments were deferred, but when it kicked in, it was a strain because the interest was so high.
The total debt was $20,000, they weren't repaying any principal and the interest rate was 23%p.a.; they had paid $4,600 in interest alone in the previous 12 months.
They rolled their hire purchase and car dealer finance into an ASB Debt Consolidation Loan. The interest rate at that time was 15.95%, so they were saving themselves nearly $1,410.00 in the first year alone.
They are putting some of that $1,410 towards a family holiday in Queenstown, which they are planning next year.
(Please note, this is not a “real life” example, it is for illustrative purposes only.)
Find out more about an ASB Debt Consolidation Loan.
With an ASB Debt Consolidation Loan, you’ll be able to work out exactly when you’ll be debt free because your payments are regular and the loan is for a defined term. Marking your 'debt free' date on the calendar is a powerful way to stay on track.
Creating a realistic budget for your household expenses may help prevent you overspending. Track your spending so you get a really clear idea of where your money is going. Refine your budget as you actually spend so it becomes more and more accurate.
If you are an ASB customer, you can use the Track My Spending function in FastNet Classic online banking to track all your household expenditure.
You can also use Save the Change to round up your electronic (EFTPOS) purchases and the difference is transferred to your savings account.
Do you tend to spend when you are happy? Do you spend more on meals than you should because it’s easier than cooking when you are tired? Do you shop on impulse? We all have debt traps; the trick is to know what they are.
Understanding your own debt traps may help prevent you getting back into debt, because once you understand your “bad” habits you can avoid them.
ASB’s lending criteria, terms and fees apply. An establishment fee of $250 may apply. ASB Debt Consolidation Loans cannot be used to repay an existing ASB Personal Loan or repay loans from friends or family. Interest rates and fees are subject to change.